MP Materials, a prominent U.S. affiliate of Chinese rare-earth refiner Shenghe Resources Holding, has ceased shipments of rare-earth metals to China. The growing trade war between the United States and China is the major impetus for this decision. In doing so, they’ve raised higher tariffs on these critical raw commodities.
Exports have ceased for rare-earth ore concentrates. This critical material is a byproduct of MP Materials’ production at their rare-earth mine and operation in Mountain Pass, California. This mine is an incredibly important source of rare-earth metals. These critical metals are essential for the expanding high-tech and manufacturing sectors.
As of late Sunday evening local time, Shenghe Resources Holding had not yet published a notice with the Shanghai Stock Exchange. They admitted that they temporarily stopped sending shipments. The company, which is backed by China’s Ministry of Finance, plays a vital role in the rare-earth market, accounting for approximately 80% of MP Materials’ consolidated revenue for the fiscal year ending in December.
The current trade war with China has wreaked havoc on MP Materials. It has tossed the global supply chain of rare-earth metals into complete disarray. These materials are key to manufacturing everything from smartphones to EVs. We recognize that their continued availability is of great importance to the defense, scientific, and medical sectors worldwide. More recently, tariffs had compelled MP Materials to suspend its own exports. The decision raises concerns about the risk of global shortages and increased prices in the world market.
MP Materials, which runs the facility in Mountain Pass, has become central to the U.S. initiative. These companies’ efforts are critical to establishing a U.S.-based supply chain of rare-earth metals. The mine has become an important pawn in the trade war that now heatedly rages between the two countries. Both are intent on protecting — if not gaining — the competitive edge in the worldwide ag-tech race.